Murphy Company had originally purchased land for $35,000.It later sold it for $35,000 in cash.Which of the following is true of the effect of the sale of land on the accounting equation?

Question

Quizplus · Accepted Answer

The sale of land for the same amount that it was purchased for has no impact on the accounting equation. The assets (land) decrease by $35,000, but the cash received increases by the same amount, resulting in no net change to the total assets. Similarly, there is no impact on liabilities or equity since there was no gain or loss on the sale.

Murphy Company Had Originally Purchased Land for $35,000